Presentation - Analyst Meet 25 July 2008
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Transcript of Presentation - Analyst Meet 25 July 2008
8/7/2019 Presentation - Analyst Meet 25 July 2008
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Contents
Introduction : KCI at a Glance
Financial Highlights
Growth Plans
Closing remarks
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Introduction
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KCI at a glance Incorporated in 1960
Over 40 years of experience in manufacturing Industrial Chemicals
Continuously Profit making since commencement of commercial productionin FY’1965
Uninterrupted Dividend since FY’1975
History
Global Investors recognizing the potential of the Company
Stock Split & Bonus issue of Equity Shares perceived well in the Capital Market. Equity Shareholdershave more than doubled in the past one year.
Shareholding
structure
National Stock Exchange of India Ltd.
Bombay Stock Exchange Ltd.Shares Listed at
9749 (as on 30th June, 2008)No. of Shareholders
57.1%
10.8%
7.2%
2.8%
8.5%
13.6% Promoters
International F inance Corporation
Banks, Fis, MFs & Insurance Cos.
FII, NRI, OBC
Corporate Bodies
Indian Public
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KCI at a glance (contd….)• Chloro Chemicals at Renukoot, Dist. Sonebhadra,Uttar Pradesh
• Alco Chemicals at Ankleshwar, Dist. Bharuch, Gujarat
• Salt Works at Samakhali, Gandhidham, Gujarat
• Bio Compost Plant at Sengpur, Dist. Bharuch, Gujarat
• Wind Farm at Dhank, Dist. Rajkot, Gujarat
ManufacturingLocations
Over 40 years of industrial chemicals manufacturing experience with a wide productportfolio achieved by forward & backward integration
Operating
Segments & keyproducts
Pentaerythritol
Formaldehyde
Acetaldehyde
Hexamine
Industrial Alcohol
Acetic Acid
Ethyl Acetate
Chloro Chemicals
Caustic Soda
Liquid Chlorine
Hydrochloric Acid
Stable Bleaching Powder
Aluminium Chloride
Poly Aluminium Chloride
Chlorinated Paraffins
Alco Chemicals
With CaptivePower
With CaptivePower
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KCI at a glance (contd…)
Extract from CRISIL GVC Rating Rationale :
“….The rating indicates that the company’s capability with regard to corporategovernance and value creation for all its stakeholders is high….”
• CRISIL GVC Level 3 rating for strong Corporate Governance Practices.Governance
• Unblemished track record of timely meeting its financial obligations
ever since the inception of the Company.Credit History
• ISO 9001 (Quality Standards)
• ISO 14001 (Environment Management)
• OHSAS 18001 (Occupational Health & Safety Assessment Series)
Certification
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Key features
Fully integrated Chlor Alkali manufacturing complex at Renukoot
Backward integration by way of 2*25 MW Captive Power Plant atRenukoot and Salt Works in Gujarat
CPP located at almost pit head leading to low generation cost
Forward integrated chemical plants fo r value added ch lorinatedderivatives
Leadership in manufacture of Stable Bleaching Powder, AluminiumChloride, Poly Aluminium Chloride and amongst Top Five in Caustic
Soda
Chloro Chemicals
30,000 tpaPoly Aluminium Chloride
11,500 tpaChlorinated Paraffins
30,000 tpaStable Bleaching Powder
17,000 tpaAluminium Chloride
25,284 tpaHydrochloric Acid (Co-product)
103,560 tpa
128,000 tpa
Current Capacity
Liquid Chlorine (Co-product)
Caustic Soda
Key Products manufactured
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Alco Chemicals
3,300 tpaEthyl Acetate
6,000 tpaAcetic Acid
22,500 KLIndustrial Alcohol
10,000 tpaAcetaldehyde
4,000 tpaHexamine
75,000 tpaFormaldehyde
6,000 tpa
CurrentCapacity
Pentaerythritol
Key Products Manufactured
Key features
Leadership in manufacture of Pentaerythritol, Formaldehyde & Hexamine
State of the art manufacturing facility
Ideally located near to raw material source as well as customer base
‘Waste to Wealth’ programme for treatment of distillery effluent : powergenerated from bio gas, recycling of water using pioneering concept of RO process in distillery and convert ing treated solid effluent into biocompost.
Self sufficient in power generated from bio-gas, natural gas & wind farm.
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KCI - USPs
USPs
Diversified
customer baseIntegrated
business with large
volumes
Independent
Board
Professional and
experienced
managementState-of-the-art
and modern
manufacturing facilities
Low cost producer
with economies
of scale
Recognised for its
quality products
Strategically
located
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Board of Directors
Experience of 4 decades in international business operations.
In charge of the affairs of Chloro Chemicals Segment.
Mr. J. P. Sonthalia
Mg. Director (Designate) –Chloro Chemicals
5 decades of experienceIn charge of the affairs of the Alco Chemicals Segment.
Mr. T D BahetyWhole Time Director
Vice Chairman and Director (Strategy) of Murugappa Group of CompaniesMr. A Vellayan
Entrepreneur with diverse business interests including property development.Mr. B D Sureka
First Chairman of the Central Elect ricity Regulatory Commission
Director General of NCAER from 1990 – 1996.
Mr. S L Rao
More than 20 years of experience in Chemicals Industry
A member of the Governing Council of World Chlorine CouncilPresident of International Chamber of Commerce (ICC) India
Mr. R V Kanoria
Chairman &Managing Director
Retired Indian Foreign Service Officer
Served as High Commissioner to countries such as Pakistan, Cyprus and Australia
A leading advocate & has more than 40 years of experience
Expertise in Corporate Laws, M&A, Banking Restructuring etc.
More than two decades of experience in industrial enterprises
Retired Bank executive with more than 45 years of experienceEx-Chairman of AXIS Bank Ltd
Mr. G Parthasarthy
Mr. Ravinder Nath
Mr. H K Khaitan
Mr. Supriya Gupta
Core group of management with over 20-30 years of experience with the company & in the industry
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Key Products User IndustryAluminium, Pulp & Paper, Soaps & Detergents, Power Plants,Steel Plants, Fertilizers, Petroleum Refining & Petrochemicals
Caustic Soda
Aluminium Chloride
Stable BleachingPowder
Formaldehyde Adhesives, Laminates, Resins & Polyurethanes
Chemicals, Agrochemicals, Pharmaceuticals
Pulp & Paper, Textiles, Water Treatment & sanitation
Pentaerythritol Alkyd Resins & Paint Industry
Hexamine Bakelite Powder, UF Resins, Explosives
Liquid ChlorinePulp & Paper, Textiles, Water Treatment, Chloromethanes,Chemicals, Sugar, Secondary Plasticizers
Diverse Product base catering to wide range of applications
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Financial Highlights
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Summarized Profitability StatementINR in millions
25.88%22.3819.5920.54PBIDT Margin ( %)
4.50%7.064.538.64NP Margin (%)
1.015.473.895.21Basic EPS (INR)
56.74305.01195.03263.56PAT
20.0990.2092.2739.20Tax
76.83395.21287.30302.76PBT
93.56317.68291.75203.69Depreciation
170.39712.89579.05506.45PBDT
93.24
(-)62.43
254.31
(+)2.90
263.73120.20Interest
Exceptional Item*
326.06964.30842.78626.65PBIDT
1260.034322.344301.223051.28Net Sales
June’082007-082006-072005-06
*Exchange Fluctuation gain/loss related to FCCBs ; Q1 NP Margin excl. this 9.46%
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Summarized Balance Sheet
13.0810.0314.52Return on Net Worth (%)
INR in millions
41.4338.7436.17Book Value per Share (Rs.)
10.178.878.56Return on Capital Employed (%)
521.92460.47404.06Deferred Tax
3534.603808.452719.32Loan Funds
2051.001777.421648.26Reserves & Surplus
281.50167.34167.34Share Capital
Created out of -
6389.026213.684938.98Capital Employed
453.201406.57412.95Net Current Assets
56.8256.8256.82Investments
5879.004750.294469.21Net Block
2007-082006-072005-06
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Business Segment wise Sales
62% 64% 66% 66%
38% 36% 34% 34%
0%
20%
40%
60%
80%
100%
2005-06 2006-07 2007-08 June'08
Chloro Chemicals Alco Chemicals
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Product wise Sales
Caustic Soda
35%
SBP4%
CP
6%PAC
2%Aluminium Chloride
12%
Pow er
5%
Pentaery thritol
14%
Ethyl Acetate
3%
Acetic Acid
3%
Acetaldehy de
2%
Others
3%
Hex amine
4%
Formaldehyde
7%
Caustic Soda accounts for majority of the Sales Revenue followed by
Pentaerythritol & Aluminium Chloride
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Operating Cost Breakup
44.7% 46.8%38.5% 42.4%
14.3%15.6%
15.7%16.3%
4.4%4.2%
4.2%4.0%
5.3%4.7%
5.4%3.7%
7.7% 6.6%
7.3%6.7%
6.3% 6.1%6.9% 6.7%
0%
15%
30%
45%
60%
75%
90%
2005-06 2006-07 2007-08 June'08
Material Cost Power & Fuel Stores
Other Mfg. Exps. Employees Cost Selling & Admn. Cost
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EPS & Book Value
5.21
3.89
5.47
36.17
38.7441.43
0
1
2
3
4
5
6
7
8
2005-06 2006-07 2007-08
0
5
10
15
20
25
30
35
40
45
EPS Book Value
Previous Year's figures have been adjusted for Sub-division and Bonus issue ofEquity Shares made during the year
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Growth Plans
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KCI – Growth Story
KCI starts theCaustic
Chlorine Plant
at Renukootwith a capacityof 16,500 tpa
BleachingPowder
Plantcapacity
expandedto 15,000
tpa
19651965 19721972 1983198319801980
CommissionedStable
Bleaching
Powder Plant
(5,000 tpa) andstarted
producing own
salt from Salt
Works
Commissioned
Ankleshwarworks to
manufacturePentaerythritol
(1,200 tpa) &other chemicals
19881988 19921992 19971997 20042004 20062006
CommissionedFormaldehyde &
Acetaldehyde Plant
with 16,500 & 6,000tpa capacitiesrespectively
CommissionedAluminium
Chloride Plant witha capacity of 6,875
tpa, expandedPenta & Hexamine
capacities to 5,000& 4,000 tpa
respectively
Further expansion
of Formaldehyde &Aluminium Chloride
Plants to 75,000 tpa& 16,000 tpa
respectively
25 MW coal
based CPP
startedcommercial
generation in Dec
2005, Agreement
signed withUPPCL for sale of
surplus power
upto 13 MW
39,600 tpacaustic Soda
Plant
commissioned
in Apr 2006
Commissioned
Hexamine Plantwith a capacityof 1,500 tpa at
Ankleshwar
Works
19771977
BleachingPowder
Plantcapacity
expandedto 10,000
tpa
19981998
Commissioned a
25 MW CPP atRenukoot Works,Commissioned
Acetic Acid &
Ethyl AcetatePlant with
capacities of 6,000
tpa & 3,300 tpa
respectively
20072007
39,600 tpa
caustic SodaPlant and 15,000tpa Bleaching
Powder Plantcommissioned
in March 2008
20082008
11.500 tpaChlorinated
Paraffins plant
commissioned in
July 2008
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Business strategy
KCI aims to become one of the largest, fully integrated, low cost manufacturer ofpremium quality Industrial Chemicals in the country
Maintain a strong, team-oriented and customer focused culture
Focus on quality, execution and timely delivery of products
Increasing production capacities and extending capabilities
Continually enhance market leadership by expanding coveragedomestically and overseas
Reducing manufacturing costs with continuing focus on quality
The growth strategy at KCI encompasses both organic and inorganic means based on acareful study of markets and contemporary business environment. The underlying ethos
of this strategy is sustainability and transparency.
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Growth Plans
To set up a Greenfield fully integrated AlcoChemicals Complex in stages at JawaharlalNehru Pharma City, Visakhapatnam
Land admeasuring 29.7 acres acquired
First Stage implementation include setting upof:
Formaldehyde Plant with an installed capacity of 100,000 tpa
Hexamine Plant with an installed capacity of 5,000tpa
Estimated Capital Outlay (excl. Land Cost) Rs. 51crores
Strategically located near to Vizag and Gangavaram Ports for handlingimport of key raw materials and finished goods export
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Estimated Financial Growth
38%Cash Profit
45%PBIDT
30%Net Sales
FY’2009
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To reiterate…
Manufactures more than 15 industrial chemicals & is Market Leader in three of them
Well positioned to capitalize on growing demand
Expertise in industrial chemical manufacturing with established relationship withcustomers
Broad based Board backed by experienced management team adhering to establishedcorporate governance procedures and practices
Recognized operational excellence by adopting the latest e nvironmental f riendly
technology
One of the largest Caustic Soda manufacturer in the Eastern India
Over 40 year old Company with consistent dividend paying track record backed bystrong f inancial performance and fundamentals
Self sufficient in Power Requirement, extra revenue by sale of surplus power
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Q&A